Smart Exit Planning Strategies for Niche Markets
Selling a Gift Wrapping Services Business
Selling a gift wrapping services business doesn't happen overnight. It takes a deliberate process to get top dollar for your company.
We're seeing a high volume of shadow inventory in the business-for-sale market.
If your exit strategy involves selling a gift wrapping services business now, you need to apply the right combination of preparation, strategy and common sense.
Average Preparation Time
There are no effective shortcuts for selling a gift wrapping services business. Since buyers prefer to see evidence of future cash flow, you'll want to to strategically lock in cash flows and increase profits before you list the business. Next, the business will need to be documented in professional financial statements and manuals that facilitate the ownership transition. Since all of this takes time and effort, a gift wrapping services business can rarely be ready for the marketplace in less than six months. A more likely scenario is that it will take more than a year to create the conditions necessary to receive the maximum sale price.
Sale Documents
We run into a lot of gift wrapping services business sellers who intend to wait until the final contract to negotiate details. Big mistake. With few exceptions, sale structure is hammered out early, in the Letter of Intent . If you are seeking buyer concessions, the time to address them is before the Letter of Intent is drafted. For sellers, that makes a close review of the Letter of Intent more than a formality - it's a critical juncture on the path to closing.
Identifying Serious Buyers
Unfortunately, many of the prospects you will encounter aren't serious buyers. As a seller, it's important to separate the tire kickers from the serious buyers as soon as possible. Each tire kicker is an investment of time and energy that could be poured into finding a more qualified prospect. Your business broker can offer insights about how to quickly spot tire kickers. As a rule, they limit the amount of information that is provided in the initial stages of an engagement, waiting to reveal the juiciest details of the business until the prospect has been thoroughly vetted. Smart sellers may require prospects to provide background and financial information fairly early in the process as a way of verifying the financial capacity to close the deal.
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